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What is Risk?  Project Management Institute (PMI) Says: “An uncertain event or condition that, if it occurs, has a positive or negative effect on the project’s objectives.” Florida Department of Transportation

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Risk Management Overview Risk Management is the systematic process of identifying, assessing, and responding to risks in order to manage or reduce potential adverse effects on the achievement of project goals. Continuous Iterative Process Florida Department of Transportation

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When to Use Risk Management Early planning and budgeting Financial Planning Support Evaluation of project delivery alternatives Establishing Risk Allocation between parties Preparation of project contract documents Throughout Project Delivery Lifecycle Florida Department of Transportation

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Benefits of Risk Management Builds confidence and credibility in project’s estimates Promotes pro-active practices and early planning to meet project objectives Facilitates development of response strategies for all threats & opportunities Better allocation of project risks Facilitates tracking of risks throughout the life-cycle of the project Identification of best project delivery method Florida Department of Transportation

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FDOT Risk Starter List Florida Department of Transportation Functional AreaRisk Name Include Risk Comments 84 Contracting and Procurement Changes in Contract Packaging1 Assumption is Segment 1 then separate contract for 2/3, low likelihood of change. Currently assuming a 2 month gap between projects, may reevaluate the staggering of projects based on estimated construction duration Contracting and Procurement Other Issues Related to Contract Language (Warranties, Liquidated Damages, DBE, Insurance/Bonding, etc.) 1 Contracting and Procurement Delays in Ad/Bid/Award Process due to Addenda or Bid Protests1 Contracting and Procurement Lack of Qualified Bidders1 Contracting and Procurement Other construction projects in region limit supply of labor, bid costs are higher as a result 1Potential issue, $600 M in lets in D2, twice of normal Contracting and Procurement Contractor Non-Performance1 Contracting and Procurement Labor and/or Productivity Disruptions1probably not a major concern - review vs. base schedule Structures & Geotech Changing Geotechnical Conditions (Due to New Information)1 Segment 1, all design geotech complete (Drilling complete, analysis is in and reports are being completed), very close to final in 90% submittal; Segment 2 not all borings are complete, have some issues accessing properties due to hunting season, there have been issues raised by one property owner about damage to property during drilling. Segment 3, have everything except for OH sign geotech and need some borings at north end for local access road.

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Base Cost Variability Review Florida Department of Transportation

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Project Schedule Review Florida Department of Transportation

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Workshop Deliverables Final report detailing the results of the workshop Final Risk Register for Project Manager to use managing the identified risks Florida Department of Transportation

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Goal of Risk Management Probability of Occurrence Impact Initial Risk Managed Risk u Risk Assessment’s aim is to assess potential impact of various scope, event, and budget risks on the project’s cost and schedule. u Risk Management’s aim is to identify opportunities and mitigation strategies to reduce both the likelihood of an event occurrence and the potential effect if it occurs. Florida Department of Transportation

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Implementation Assistance Levels of Engagement Proof of Concept Pilot Funds for piloting products to evaluate readiness for implementation Contractor support to collect data and evaluate the application Lead Adopter Incentive Funds for early adopters to offset implementation cost and mitigate risks Recipients required to provide specific deliverables designed to further refine the product User Incentive Funds for implementation support activities after early adopter use Used to conduct internal assessments, build capacity, implement system process changes, organize peer exchanges, or offset other implementation costs 27

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Sisters Creek Bridge Replacement Project Overview – Located on SR 105, northeast of Jacksonville – The proposed project will: Replace a movable bridge with a fixed span, high level bridge Be built offset to existing bridge, on a new alignment, and tie into existing roadway Use existing FDOT right-of- way for new alignment Florida Department of Transportation

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Risk Response Strategies Threats Risk Factors that Increase Cost or Schedule Opportunities Risk Factors that Reduce Cost or Schedule Avoid: Change the project scope to eliminate the impact of a risk. Exploit: To make a proactive decision to take action to show that an opportunity is realized. Transfer: Move a risk to another party who is more capable at handling the risk (such as the developer or insurance company). Share: Assigning ownership of the opportunity to a third-party who is best able to capture the benefit for the project. Mitigate: The project team may seek to lessen the impact of a specific risk item, which may involve the consumption of additional time and/or money. Mitigation usually requires positive action and has a cost. Enhance: Take action to increase the probability and/or impact of the opportunity for the benefit of the project; seeking to facilitate or strengthen the cause of the opportunity, and proactively targeting and reinforcing its trigger conditions. Accept: To take no action when a response may be too costly to be effective or when the risks are uncontrollable and no practical action may be taken to specifically address it. In active acceptance, the project team sets up a contingency reserve fund to account for the residual expected value of the remaining risks. Florida Department of Transportation

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Risk Management “Hope is not a Strategy” Florida Department of Transportation

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Risk Response Planning Risk Response Plan – A plan of action designed to reduce the impact once a risk event has occurred – Planning – Prior to the risk event occurring as though it will occur – Trigger – Identifies that the risk event has occurred and notifies the team to implement the risk response plan – Implementation – Actions to take after the risk event has occurred Florida Department of Transportation

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Tracking, Monitoring & Control Risk Response PlanMonitoring & Control Strategy Action To Be Taken (response actions including advantages and disadvantages. Specify the time frame Risk Owner Risk Review Dates Date, Status & Review Comments (to show the history of risks monitoring, do not delete previous comments) Mitigation Finalize design to identify all wetlands that are impacted. Early coordination with the outside agencies to determine mitigation ratio Design Leader / Environ. Mgr Dec Jan-2 As of Nov. 15, 2008 there are only two potential areas where there could be additional wetland impacts. As of De. 2, 2008 agency has initially determined that mitigation ratio would be 4:1. Florida Department of Transportation